As the nation's retailers reported sales results Thursday, discounters and some moderate-price stores remained strong. Wal-Mart Stores Inc. and Kohl's Corp. had figures that exceeded Wall Street expectations.

But Gap and other mall-based apparel stores did well too, halting at least temporarily a prolonged slump. Gap reported its first gain in sales at stores open at least a year since April 2000. The 11 percent gain surpassed by far the 0.6 percent increase analysts forecast.

Sales at stores open at least a year, known as same-store sales, are considered the best gauge of a retailer's health.

There were still some pockets of weakness, including department stores and warehouse clubs, particularly Costco Wholesale Corp. The exceptions included J.C. Penney Co. Inc. and Nordstrom Inc., both of which reported results that pleased Wall Street.

"Is the retail industry finally on the mend? It appears that tentatively the answer could be yes," said Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd., whose same-store sales tally was up 3.1 percent for the month. Niemira had expected a 2 percent gain.

"You are starting to see some life in the industry," he said.

Niemira now believes merchants could have same-store sales for the holidays at the high end of his forecast of a 2 percent to 3.75 percent gain. Previously, he expected results at the low end of that range.

The better-than-expected results caused a slew of retailers, including Penney, Kohl's Corp., Gap, AnnTaylor Corp., Talbots Inc. and Federated Department Stores Inc., to upgrade their earnings projections for the third quarter, after many had downgraded their forecasts only a month ago.

One of the most dramatic revisions came from Gap, which said profits will be in the range of 12 cents to 14 cents a share. Analysts surveyed by Thomson First Call expected 6 cents per share.

Gap reports its results on Nov. 14.

Meanwhile, the government released two upbeat economic reports. The Labor Department said new claims for unemployment benefits dropped last week by a seasonally adjusted 20,000 to 390,000, the lowest number since early October.

The department also reported that productivity, a vital element in the economy's long-term health, grew at an annual rate of 4 percent in the summer. It was the strongest performance since the beginning of this year.

Analysts are waiting to see how consumers will behave in the crucial November and December months, which combined account for nearly a quarter of merchants' annual sales.

Certainly, (the cold spell) helped propel consumers to buy the merchandise, and it's a first boost for retailers in the last six weeks," said Walter Loeb, president of Loeb Associates, a retail consulting company. "But going forward, retailers will have a hook out to lure consumers with strong promotions."

What concerns analysts is there is so much economic uncertainty the prospect of war in Iraq, a sluggish job market and a volatile stock market. Furthermore, they are worried about the slowdown in wage growth that could make consumers pull back for the holiday season.

Adding to retailers' headaches is the 10-day shutdown of West Coast ports that left mounds of holiday merchandise stranded. Analysts, however, say it appears cargo is indeed moving, and that retailers are getting shipments to their stores.

Furthermore, retailers bemoan that there isn't a must-have toy or fashion item to help bring in shoppers. But there are several toys that are hits with consumers, including Mattel's Barbie as Rapunzel, anything to do with the Japanese game Yu-Gi-Oh! and merchandise tied to the "Spider-Man" movie.

Analysts expect discounters, particularly Wal-Mart, Kohl's and Target Corp., to have a strong holiday, but department stores will face the biggest challenges.

Wal-Mart posted an October same-store sales increase of 3.7 percent, far better than the 3 percent gain Wall Street projected. Kohl's said same-store sales rose 18.3 percent, better than the anticipated 5.8 percent.

Target said same-store sales increased 1.5 percent. Wall Street expected a gain of 0.4 percent.

Among the stores that languished are Sears, which blamed the weak economy for sluggish sales of big-ticket items such as home appliances, home electronics and jewelry.

The company, however, was pleased with its apparel business, which experienced "substantial improvement."

Sears reported a same-store sales decline of 10 percent, much worse than the 6.6 percent decline Wall Street forecast.